Thursday, August 8, 2013

Truth in Taxation Hearing

Last night the highlight of the City Council meeting was the Truth in Taxation hearing.

City Administrator John Inch Morgan gave an explanation of the Truth in Taxation process. He also addressed some "Frequently Asked Questions" by residents. They include:

1. How much did the city budget increase over last year?

A: The budget increased 0.5% over last year’s budget. The largest increases to the budget were the Unified Fire Authority contract, which increased 5% over last year, and the Unified Police Department contract which increased 2.9% over last year.

2.     If the budget only increased 0.5%, why are we having a 29.6% tax increase?

A: In past year’s funds were taken out of the city’s fund balance (savings account) to balance the budget. Using savings for ongoing operations in the depths of the recession was a temporary measure when revenues decreased, but is not a strategy that can be employed year after year. This year there are not enough funds to take from savings.

3.     What is the greatest single source of revenue for the city?

A: Sales tax revenue is the greatest single source of revenue. Sales tax revenue decreased by almost $2 million dollars during the recession, and although we realized some increases over the past two years, in this budget we are $840,000 less than our peak in 2008.

4.     Do we have more employees/contractors per capita in Taylorsville than in other cities?

A: No, we actually have fewer employees/contractors per capita in Taylorsville than other cities do.

5.     Have you cut the expenditures in the budget? Did the employees get raises? Do you bid out services for the least expensive price?

A: Expenditures have been cut in each year since the recession began, Taylorsville employees are not getting raises, and the City is routinely issuing bids for services to get the lowest cost for service and construction projects.

Scott Harrington, CFO, gave a summary of the city's revenues. He said sales tax revenue is still down from 2008 levels by  840,000, and B&C (road funding) is down $300,000 from 2004 historic highs. Harrington said the expenses for this year include the police and fire contract increases, additional funds for road maintenance, an additional police officers partially funded by a grant, and health insurance and retirement cost increases. Although these additional expenses impacted the budget, the decrease of six employees and other cuts, helped keep the budget increase under 1%.

During the public hearing, 10 residents spoke. Five were against the tax increase, three had questions, and two were in favor. 

Some of the questions that were asked during the public hearing include:
1. Why do my taxes go up even though my property size is not increasing? (Inflation affects cities just like it affects everyone else. Cities are heavy users of gasoline, which becomes expensive. As costs increase, the city has to find ways to pay them and property taxes are the most stable source of revenue.)
2. Does my property tax bill go up when property values increase? (No, the county adjusts the certified tax rates so government doesn't receive any more than they have passed, or any less than they've passed.)
3. What are we doing to promote economic development and improve sales tax revenue? (The economic development team gave a report at the end of the public hearing. See below...)

An Economic Development report was presented Donald Adams. He said it's been difficult making up for years of misperceptions and incorrect data about Taylorsville and its market trade area. Brokers and tenants are responding positively to our efforts to inform, advise, educate and tour. Tenants are looking, but have a long list of demands.

Things developers and retailers are saying about Taylorsville: They like the location and geography, demographics are acceptable, city and centers look old and worn, the city needs to clean up, landlords must update their centers, the city must invest in its infrastructure for access, beautification and mobility, incentives are critical.

Several food establishments will be announced in the coming weeks that will be locating in the 5400 South Redwood Road area. Other tenants are in the works to occupy the old Furniture Warehouse site on 5400 S. Redwood Road. Conversations are moving with potential tenants for the 5400 S. Bangerter Hwy (old Kmart/Albertsons site).

The council voted 4-1 in favor of the tax increase.

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